The letter from Cadbury chairman Roger Carr to Kraft Foods chairman and chief executive Irene Rosenfeld explained why Cadbury rejected the offer.
Kraft Foods launched a £10.2 billion (US$16.7 billion, €11.7 billion) bid for Cadbury on Monday, an offer spurned by the British group as takeover activity appeared to be returning to the market.
Despite the snub, Kraft said it hoped the venerable maker of Cadbury Dairy Milk chocolate bars and Trident chewing gum, among other brands, would eventually jump on board.
"In my letter of August 31, I informed you that the board had rejected your unsolicited proposal on the grounds that it is unattractive and fundamentally undervalues Cadbury," wrote Carr in the letter dated Monday.
"Under your proposal, Cadbury would be absorbed into Kraft's low growth, conglomerate business model, an unappealing prospect which contrasts sharply with our strategy to be a pure-play confectionery company."
"Your proposal fundamentally fails to reflect the current value of Cadbury as a standalone business, its growth prospects and the potential synergies of a combined entity."
Kraft Foods, the world's second largest food company after Nestle, said it hoped the takeover would increase annual revenues to $50 billion a year from $42 billion presently.
It added that by combining the groups, plans for about 500 job cuts at Cadbury in Britain would be scrapped.
Source: AFP
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